Key Messages

Canada’s strength is in delivering a high-quality education with comparatively modest spending to people between the ages of 5 and 19.

Canada needs to improve workplace skills training and lifelong education. Canada also underperforms in the highest levels of skills attainment.

Putting Canadian Education and Skills in Context

In Canada, education is seen as the most desirable route to earning a decent living and to enhancing personal growth and happiness. Educated people not only earn higher incomes but also contribute disproportionally to business innovation, productivity, and national economic performance. There is a strong and direct relationship between investments in education, educational attainment, and economic growth. A 2003 multi-country study from the European Commission found that if the national average educational attainment level is increased by a single year, aggregate productivity increases by 6.2 per cent right away, and by a further 3.1 per cent in the long run.1 Recent evidence also suggests that educated people make decisions that lead to healthier and longer lives.2 Education drives success.

What is new in this year’s report card?

Several important updates were made to our Education and Skills report card this year.

Italy was dropped from the Education and Skills report card because its income per capita is not high enough anymore for it to be considered a peer country under our methodology. While Italy has already been included in the most recent updates for the Health, Environment, and Society report cards, it is not included in the recent Education and Skills, Economy, and Innovation report cards.

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How is education performance measured?

Education performance is assessed using 20 indicators across three levels of labour market participation:

Basic participants

Mainstream participants

Advanced participants

Basic participants: These people have low literacy and basic skills, are often unemployed, lack coping strategies, and when employed, cannot perform most jobs fully competently. The goal for this group of participants is to prevent social exclusion, minimize the poverty trap, and strengthen their connection to the labour force. This is done by decreasing the proportion of students with low-level reading, math, and science skills, by decreasing the proportion of adults with low-level literacy skills, and by improving the performance of disadvantaged schools.

Mainstream participants: These people have mid-range literacy and job-specific skills, are usually employed and performing their jobs reasonably competently, but may be experiencing difficulties in adjusting to workplace change. The goal for this group of participants is to develop entry-level skills for the modern economy and to improve their ability to adapt to change. This is done by ensuring that people complete high school, by increasing the proportion of students with high-level reading, math, and science skills, by boosting adult participation in non-formal job-related education, and by improving equity in learning outcomes.

Advanced participants: These people have high literacy and job-specific skills and advanced thinking skills that enable them to adapt to workplace change, innovate, and create new processes, products, and services. The goal for this group of participants is to ensure the acquisition of skills that provide intellectual leadership, create new products, companies, and processes, and that benefit other members of society. This is done by focusing on increasing the university, PhD, and college completion rates, by increasing the proportion of graduates in science, math, computer science, and engineering disciplines, by increasing the proportion of students with high-level reading, math, and science skills, by increasing the proportion of adults with high-level literacy skills, by boosting the foreign student index, by reducing the gender gap in tertiary education, and by enhancing the return on post-secondary education.

What is the link between education and earnings?

A 2009 OECD report on education confirms that, with few exceptions, earnings increase with each level of education.3 The earnings benefit of higher education can be seen in the following chart. The chart shows how much a person at each level of education (below high school, college, and university) earns for every $100 earned by a high-school graduate.

The chart tells us that people with a university degree in the U.S. earned $184 for every $100 earned by high-school graduates. Those with a college degree earned $111 for every $100 earned by high-school graduates, and those who did not graduate from high school earned only $66 for every $100 earned by high school graduates.

The returns to higher level education are lower in Canada. Canadians with a university degree earned $165 for every $100 earned by Canadian high school graduates. Those with a college degree earned $110 for every $100 earned by high school graduates, and those who did not graduate from high school earned only $80 for every $100 earned by high school graduates.

Several interesting observations can be made about the results shown in the chart:

The relative earnings benefit of a university education is highest in Ireland and lowest in Norway.

The relative earnings benefit of a college degree is higher than the benefits of a university degree in Norway.

The relative penalty for not completing high school is lowest in Finland and highest in the U.S. and Austria.

The relatively lower financial returns on university education in Norway and Canada may be due to the dominance of their energy sectors, which offer relatively high-paying jobs that do not require university educations.

How does Canadian education measure up?

When benchmarked against its peers, Canada earns an “A” grade on the Education and Skills report card. It ranks 2nd behind Finland. Canada achieves “A” or “B” grades on 13 of 20 indicators.

Canada's strength is in delivering a high-quality education with comparatively modest spending to people between the ages of 5 and 19.

To enlarge this report card in a new window, click on the image below.

The radar diagram below is a snapshot of Canadian education and skills performance (and the 16-country average performance) relative to that of the best-performing peer country—the outer ring—for each of the 20 education indicators. The chart has 20 axes—one for each indicator—that radiate out from the centre. A score closer to the centre represents worse performance, while a score closer to the outer circle represents better performance.

Use the pull-down menu to compare Canada's performance with that of any of its peers.

As the radar diagram shows, Canada’s performance is significantly above average4 on nine of the indicators: college completion, equity in learning outcomes, high school completion, performance of disadvantaged schools, students with high- and low-level reading skills, students with high- and low-level math skills, and students with low-level science skills. Canada is the top performer on the college completion rate and is almost at the outer ring (i.e., the top performer) for high school completion.

Canada ranks significantly below average5 on two indicators: participation in non-formal job-related education and the number of PhDs.

Has Canada’s performance improved over time?

Historical data were available for 12 of the 20 Education and Skills indicators.

The Conference Board ranks the change in performance on each indicator as “better,” “worse,” or “no change” (rather than A-B-C-D) and uses absolute performance (rather than relative performance, as in other main report card categories).

Canada’s performance improved for 6 of the 12 available indicators and worsened for 6.

Between 1998 and 2010, the high school completion rate increased from 78.7 per cent to 88.4 per cent, the college completion rate increased from 19.9 to 24.2, and the university completion rate increased from 18.2 to 26.4.

Students skills deteriorated somewhat. The proportion of students with high-level reading, math, and science skills dropped, while the proportion of students with low-level reading and math skills increased.

What are Canada’s strengths?

Canada’s strength is in delivering a high-quality education to people between the ages of 5 and 19 with comparatively modest spending. While Canadians are at school, they become well educated (for the most part) in core subjects like mathematics, reading, and science. Canada now has the second-highest rate of high school completion and the highest rate of college completion among its peers.

Canada also ranks well on two new indicators added this year. The equity in learning outcomes indicator measures the gap in student reading test scores of Canadian-born students who speak the language of the test (i.e., English or French) at home and the scores of Canadian-born second-generation students who do not speak the test language at home. Canada ranks in second place and gets an “A.” Canada's score puts it close behind first-place Australia and well ahead of its next closest competitor, the United Kingdom. The performance of disadvantaged schools indicator measures the difference in reading test scores between 15-year-old students in the most and least disadvantaged schools. The difference in reading scores between the most and least disadvantaged schools in Canada is 31 points—the equivalent of about 10.3 months of learning. This result earns Canada an “A” grade and 3rd spot behind Norway (13 points) and Finland (23 points). Countries with smaller learning outcomes gaps are considered to have more equitable and efficient learning systems.

What are Canada’s weaknesses?

Canada needs to improve workplace skills training and lifelong education. Canada’s adult literacy skills are mediocre, with a large proportion of adults lacking the literacy skills necessary to function in the workplace. Canada gets a “C” and ranks 10th out of 15 peer countries on the indicator measuring adult participation in job-related non-formal education.

Canada also underperforms in the highest levels of skills attainment. Canada produces relatively few graduates with PhDs and graduates in math, science, computer science and engineering. More graduates with advance qualifications in these fields would enhance innovation and productivity growth—and ultimately ensure a high and sustainable quality of life for all Canadians.

Canada’s middle-of-the-pack ranking on university completion may reflect the fact that the financial return from investing in university education in Canada is also middle-of-the-pack at best. Many other countries (and the individuals in those countries) get much better returns on their tertiary investments.

While not reflected in the report card due to lack of data and measurability challenges, there is a “learning recognition gap” in Canada. What this means is that people may hold knowledge and skills that are not formally recognized (through academic credits or trade/organization/professional certification) by employers or credential-granting institutions. An obvious example is immigrants whose foreign credentials are not recognized in Canada. The Alliance of Sector Councils stated that “every Canadian is affected by inefficient recognition. Canadians across the country are short of doctors and other health care workers, while thousands of highly educated newcomer health care workers are not allowed to provide the services that so many Canadians want.”6 People with prior learning gained through work and training are similarly hindered by a lack of learning recognition, as are those who transfer between post-secondary institutions or, in the case of licensed occupations, between provinces.

In 2001, The Conference Board of Canada conducted a study that estimated that the learning recognition gap was costing the country between $4 billion and $6 billion annually in lost income and higher unemployment.7 To address this challenge, there have been a number of programs established, such as the federal Foreign Credential Recognition Program. While helping to close the learning recognition gap, a mismatch remains that is costing the country in lost productivity and skill shortages.

What does Canada have to do to improve its grade?

Some long-term structural issues are not being adequately addressed through Canada's current approach to education and skills. To maintain its high ranking, Canadians need to have access to education and skills outside the traditional school system. Currently, Canadian employers are notably low investors in workplace training programs. And of what they do invest, only a very small percentage—less than 2 per cent—goes to basic literacy skills. As a result, the Canadian training system does not fill the skills gap for people who, for various reasons, have not acquired skills at school. Much more needs to be done in the workplace in order to improve Canada's adult literacy rate.

Demographic change in Canada offers an opportunity to shift resources from the formal education system into the skills system. Instead, as the population of school-aged Canadians declined in the 1990s, education spending on youth kept increasing. Canada will need to shift resources into other parts of the education and skills system as demand for traditional schooling continues to decline.

Footnotes

1 Angel de la Fuente, Human Capital in a Global and Knowledge-Based Economy, Part II: Assessment at the EU Country Level, Final report for the Employment and Social Affairs Directorate General, European Commission (Luxembourg: European Commission, 2003), 4.

4 More than 10 percentage points above the 16-country average on the normalized values for each indicator. For more information on the normalization methodology, see the Methodology section on this website.

5 More than 10 percentage points above the 16-country average on the normalized values for each indicator. For more information on the normalization methodology, see the Methodology section on this website.

6 The Alliance of Sector Councils, Who Does What in Foreign Credential Recognition: An Overview of Credentialing Programs and Services in Canada (Ottawa: The Alliance of Sector Councils, 2008), iii.